RBA slashes Rates by a full 1% - Page 4

*rayman* · 10-10-2008, 10:16 AM

Quote:

As a side note has anyone done the math on buying and selling recently? i did yesterday... to sell and buy (move homes) a property of similar value of around $800K will set you back close to $70K in costs and fees!!!!

I feel sorry for you guys having to pay that much for housing.... average house price up here is between $350 - $450k..... unless you want to buy something more than average....

DOC · 10-10-2008, 10:25 AM

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Originally Posted by 4Vman

Hm.. i think that's already happened to some extent..
The 1% drop has created an instant wave of interest in property here in Vic, !!!!

(my view only), the clever ones have already sold their investment properties, yes there will be a flood of people now trying to offload what they have, but as predicted ( a 40% ) drop in house values coming up ) they will now sit, a bit of time now and it will be a buyers market.

I don't think the 40% will get there but you probably could look at a min of 20% on current value of an average house to drop.

Around here they are now popping up for sale daily, in the hope to offload before the drop hits., then again i am wrong as often as right.

XWGT · 10-10-2008, 12:11 PM

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Originally Posted by *rayman*

Bit of a flipside view for all us car enthusiasts.....

This is going to affect the over inflated prices of muscle cars (both here and in the U.S) as more people decide they dont need so much money tied up in a lifestyle asset. It may go further and affect prices on expensive vehicles period.

There will be people that have bought these types of cars that can and will afford to keep them, and then there is the group that have purchased them with equity from their houses, or from 'mining boom' related jobs. They will also have a lot of other lifestyle assets most likely try and move to free up some money if times get tougher....

There may be some bargains turn up in the coming months / years.... just make sure you have the money to snap them up when they appear.

It may not happen overnight, but it will happen.

Your absolutely right here. US Muscle has been a lot better value over the last 6 months alone as opposed to AUS Muscle.

Only issue now is the dollar dropping through the floor. There was a Mach 1 Mustang I had my eye on that was going to cost me around $48k when the rate was in the nineties, today that will cost me around $80k......so not going to happen. However the US based price will continue to fall so I expect some bargains in 12 months time

BENT_8 · 10-10-2008, 01:32 PM

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Originally Posted by 4Vman

Hm.. i think that's already happened to some extent..
The 1% drop has created an instant wave of interest in property here in Vic, i've got 3 friends who are mortgage brokers, all work for separate firms, their phones went into melt down over the past few days, the lowering of interest rates and the forecast of another wave of falls has excited the market, watch auction results over the coming months.....

Weren't you the guy who said Aussie muscle car prices would continue to rise 18ths ago??
The only HO's worth 800k these days are the ones that arent on the market!

Perhaps house prices might fall afterall, again something i forecast 12mths ago and got shot down.

As for keen buyers, they may want to buy, but will the banks lend??

mr smith · 10-10-2008, 02:30 PM

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Originally Posted by BENT_8

Weren't you the guy who said Aussie muscle car prices would continue to rise 18ths ago??
The only HO's worth 800k these days are the ones that arent on the market!

Perhaps house prices might fall afterall, again something i forecast 12mths ago and got shot down.

As for keen buyers, they may want to buy, but will the banks lend??

Or even have a job, my opinion is that big job losses are just around the corner. My work has begun letting people go ( more pushing them out the door) and contracts are slowing rapidly.

balthazarr · 10-10-2008, 02:36 PM

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Originally Posted by BENT_8

...As for keen buyers, they may want to buy, but will the banks lend??

Of course they will lend. They might tighten up for a few months, but then greed will get the better of them, and they will be back to doling out money hand over fist.

Laminge · 10-10-2008, 02:41 PM

This thread is so amusing, I wonder how people actually migrated from their school bank accounts and football trading cards...

irlewy86 · 10-10-2008, 03:09 PM

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Originally Posted by GTP006

The boom will not end any time soon, it may suffer a hiccup but it is really still in its infancy.

Doesn't really matter if it does any way, the whole industry underinvested the entire time and expected to prices to begin to stabilise 3 years ago. This will be a 4 or 5 year low point before India pulls its finger out then it will be all go again.

Citric GT · 10-10-2008, 03:24 PM

I hope to be buying a house in the next month or so. The interest rate hasn't made any difference to what I want to borrow, but I wonder how many people will now want that little bit more?

I don't wish to offend anyone, but I reckon no mortgage should be offered to anyone with less than 10% deposit. I welcome the tightening of lenders requirements.

balthazarr · 10-10-2008, 04:41 PM

Quote:

Originally Posted by Citric GT

I hope to be buying a house in the next month or so. The interest rate hasn't made any difference to what I want to borrow, but I wonder how many people will now want that little bit more?

I don't wish to offend anyone, but I reckon no mortgage should be offered to anyone with less than 10% deposit. I welcome the tightening of lenders requirements.

I wonder how many people have paid for "mortgage insurance", and not realised that it's insuring the mortgagee (the lender), and not the mortgagor (ie. them).

*rayman* · 10-10-2008, 06:28 PM

IMPORTANT NEWS: CRISIS HITS JAPAN

Just received this alert from our head of research:

Following the problems in the sub-prime lending market in America and the run on Northern Rock in the UK, uncertainty has now hit Japan .

In the last 7 days Origami Bank has folded, Sumo Bank has gone belly up and Bonsai Bank announced plans to cut some of its branches.

Yesterday, it was announced that Karaoke Bank is up for sale and will likely go for a song, while today shares in Kamikaze Bank were suspended after they nose-dived.

While Samurai Bank is soldiering on following sharp cutbacks, Ninja Bank is reported to have taken a hit, but they remain in the black.

Furthermore, 500 staff at Karate Bank got the chop and analysts report that there is something fishy going on at Sushi Bank where it is feared that staff may get a raw deal.

vanman_75 · 11-10-2008, 11:35 AM

^ classic^

Bent8 · 13-10-2008, 12:02 AM

My guess is (if the US economy doesn't completely collapse by then) that there will be at least another 1-2% cut by Christmas.

This is a very desperate move by the Reserve Bank which is now following in the footsteps of the US Federeal Reserve which cut their rates last week to 1.75%!

4Vman · 14-10-2008, 11:37 AM

Now the Govt is planning to double first home buyers grant from 7K to 14K....

http://www.news.com.au/heraldsun/sto...38-664,00.html

Scott · 14-10-2008, 12:31 PM

^^ lol. Kinda like givng away free icy-poles in the middle of a snow storm.... atleast they offered.

4Vman · 14-10-2008, 12:39 PM

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Originally Posted by GTP006

^^ lol. Kinda like givng away free icy-poles in the middle of a snow storm.... atleast they offered.

All it means is housing prices will go up another 7K and first home buyers will be even less inclined to save a decent deposit because the Govt will give it to them for free....

Id rather see the Govt do more to offer these first home buyers decent financial planning and budgeting advice than just give handouts..

FTE72 · 14-10-2008, 12:48 PM

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Originally Posted by 4Vman

All it means is housing prices will go up another 7K and first home buyers will be even less inclined to save a decent deposit because the Govt will give it to them for free....

Too true and so sad. Easy credit and a "want it now" attitude is part of the cause of these problems IMO

4Vman · 14-10-2008, 12:50 PM

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Originally Posted by FTE72

Too true and so sad. Easy credit and a "want it now" attitude is part of the cause of these problems IMO

Its a BIG part of the problem.
At a bare minimum id like to see the Govt make first home buyers attend financial planning "training and awareness" and pass a certain level of understanding as part of qualification to receive the grant...

vanman_75 · 14-10-2008, 01:53 PM

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Originally Posted by 4Vman

Its a BIG part of the problem.
At a bare minimum id like to see the Govt make first home buyers attend financial planning "training and awareness" and pass a certain level of understanding as part of qualification to receive the grant...

you are right with the training and saving ,but with such a shortage of homes and mega home prices ,wages not increasing to the market ,it may be the only way people get into a home ,these people can save cash .but to save 30-40 g, while lining the pockets of gready investors trying to squeeze every last penny out for rent .these problems would not of occured if the previous govt thought more about the countries infrastructure than,filling the piggy bank.its that or put a couple extra beds in the house and have 3-4 generations under the roof ,like many of our less fortunate neighbouring countries.
it isnt the answer but without a realignment of our economy ,i dont know the solution

4Vman · 14-10-2008, 03:23 PM

I can remember buying my first property.. interest rates were about 17%!!! but property was cheaper.. as interest rates have dropped property values have risen... making homes "more affordable" is a bit of a misconception... because all the handouts and lower interest rates do is increase property values..

XWGT · 14-10-2008, 03:30 PM

Actually its tripled to $21k

Beauty, my house just went up $14k :-)

SB076 · 14-10-2008, 03:31 PM

Isnt the goverment running some first home buyers saving scheme at the moment??? Ie if you save $5000 in a year for a house the government will match it with another $5000

I find it interesting that a some younger people (I am still reasonably young) cant save, as soon as they have cash they spend it and if they dont have cash they wack it on the credit card

XWGT - is that state and federal government grants combined??

XWGT · 14-10-2008, 03:41 PM

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Originally Posted by SB076

XWGT - is that state and federal government grants combined??

Correct

$21k now up for grabs..............not that it would cover stamp duty in Vic........but $21k is a LOT of $ to be handed IMO

Yellow_Festiva · 14-10-2008, 05:59 PM

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Originally Posted by XWGT

Actually its tripled to $21k

Beauty, my house just went up $14k :-)

I think $21k is only for newly built houses, ie if you buy a 'home and land package'.. $14k is for someone buying an existing dwelling.

Yellow_Festiva · 14-10-2008, 06:05 PM

Quote:

Originally Posted by SB076

Isnt the goverment running some first home buyers saving scheme at the moment??? Ie if you save $5000 in a year for a house the government will match it with another $5000

I find it interesting that a some younger people (I am still reasonably young) cant save, as soon as they have cash they spend it and if they dont have cash they wack it on the credit card

XWGT - is that state and federal government grants combined??

Thats right. You can put away a max of $5000 a year for 3 years, and the Gov' will throw in $8?? for each $5K per year.

The return on your account is around 17%, which is great. However it is strictly a first home buyers deposit account. You pull the cash out and use it for anything else and any extra cash you had received is handed back.

chief · 14-10-2008, 09:27 PM

4Vman I agree that the first home buyers grant will push up prices in certain situations. You can only get the first home buyers grant after signing the deeds to the place which you wish to buy. The loan has to already be approved. That $14,000 plus 25 years of interest will be a significant saving. It will stimulate the market by the perception that the home buyer is getting a good deal.

I am looking at getting into the property market at the current time and concur that people need to have some financial knowledge prior to going through this life changing event. Seeing a bank, credit union, lender with their own agenda does not count.

Scott · 15-10-2008, 01:59 PM

10 Reasons for the Global Financial Crisis (in video):
http://www.liquidgeneration.com/Medi...the_Recession/

vanman_75 · 15-10-2008, 04:56 PM

^funny but oh so true ^

Citric GT · 15-10-2008, 04:59 PM

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Originally Posted by GTP006

10 Reasons for the Global Financial Crisis (in video):
http://www.liquidgeneration.com/Medi...the_Recession/

I felt ill after watching that!

As much as I blame people for getting themselves into a financial mess, I think the US government is as much to blame for allowing that sort of business to go on.

FTe342 · 15-10-2008, 07:45 PM

Fixed rates are falling fast!

In the last week a few lesser known lenders have reduced their fixed rates by around 0.7%pa.

But today CBA announced their fixed rates will fall by approx 1.55%pa to low 7's next Monday.

While the media only ever report what the RBA is doing with the Cash rate (which is variable) the market never focus on fixed rates. The crash in US in obviously affecting their bond artes which in turn affect the cost of fixed rate money here

So while you could jump into a fixed rate at 0.5% less than variable ATM of course it wouldn't be a good idea with a further variable rate cut of 0.5%pa expected to be announced by RBA in Nov

My point is watch both fixed and variable rates if considering a home loan. Not advocating you should fix in the present market. Take a base variable rate and ride it down for the moment but consider a fixed rate for at least half your home loan when you think they have bottomed out